A record number of Americans lost their homes to foreclosure in May. Almost 94,000 homes were seized by lenders as banks continue to work through a massive backlog of distressed properties.

Although foreclosures are at the highest levels on record, there is some evidence that the foreclosure crisis may be starting to ebb, as fewer and fewer homes enter the foreclosure process. This could be because banks are allowing delinquent owners to stay in their homes longer while modifications and payment plans are devised. Another possibility is that the banks simply have too many foreclosed properties to work through, and there is a backlog of work to be done.

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According to RealtyTrac almost 323,000 homes received a foreclosure-related notice in May. This represents an increase of .5 percent from May 2009, but a decrease of 3 percent from April 2010. It will likely take years and years for the glut of distressed properties to be absorbed, likely hurting home values for years to come. RealtyTrac lists 900,000 real estate owned (REO) properties in its database, an all-time high.

Despite REO bargains and extraordinarily low mortgage rates buyers are not rushing to purchase homes. Mortgage activity is down significantly over the last several weeks, and purchase applications are at their lowest point since 1997.